MR. JASBIR SINGH SARKARIA Vs. COMMISSIONER CONCERNEDCOMMISSIONER OF INCOME TAX-II

JUDGEMENT

(1.) Facts:

(2.) BROADLY , the question that has to be answered in this case turns on the year of chargeability of the income attributable to capital gains. The applicant, who is a citizen of USA, is the co -owner of agricultural land of an extent of 27.7 acres. The other co -owners are his brother and sister. The applicant is entitled to 4/9th share therein. The applicant and other co -owners having decided to develop the land by constructing a residential complex thereon through a 'developer' entered into a 'Collaboration agreement' on 8.6.2005 with M/s. Santur Developers Pvt. Ltd., New Delhi. On behalf of the applicant, the agreement was signed by his brother and Power of Attorney holder Mr. Karanbir Singh Sarkaria. According to the terms of the agreement, the developer should obtain the 'Letter of Intent' from the concerned Government department and obtain other permissions and sanctions for developing the land at its own risk and cost. The developer will have 84 per cent share of the entire built up area and the proportionate land area whereas the owners' share will be 16 per cent. The mode of apportionment of the built up area is indicated in clause 21 of the agreement. The consideration for the agreement is the portion of the built up area to be handed over to the owner free of cost. Owners are entitled to visit the site in order to review the progress of the project. It is clarified in clause 18 that the ownership would remain exclusively with the owners till it vests with both the parties as per their respective shares on the completion of the project. The other clauses and the steps contemplated in the agreement are the following:

(3.) ON the other. In essence, it is an agreement to sell the 16 per cent share of the owners in the built up area to the developer or its nominee for a consideration of Rs.42 crore.